Statoil asks India if it wants LNG from Tanzania

Vol 16, PW 5 (20 Sep 12) People & Policy

Statoil is looking to India as a potential market for LNG from Tanzania, as this former British colony joins Mozambique to become the latest east African nation to emerge as a major future gas exporter.

Foreign ministry sources in Delhi tell PETROWATCH that Tim Dodson, a Statoil VP, offered Tanzanian LNG to India during a meeting on August 23 with the Indian high commissioner to Dar es Salaam: Debnath Shaw. “Dodson told Shaw that India is looking for long-term LNG supplies,” reports our source.

“He said Statoil is looking for buyers and asked if Indian companies would be interested” Statoil’s interest in India follows an announcement on June 14 of a 3-tcf ‘in-place’ discovery at the ‘high-impact’ offshore Lavani well at the 5500-sq km Block 2, which the Norwegian explorer shares with Exxon (35%). Statoil is operator with 65%.

In February Statoil announced a 5-tcf ‘in-place’ discovery at the nearby Zafarani well 16-km away, later raised to 6-tcf. This, plus equally impressive discoveries by BG, is encouraging talk of building a LNG export facility.

Tanzania’s hydrocarbon authority, the Tanzania Petroleum Development Corporation, is promoting the idea of a two-train liquefaction plant ready to begin exporting by 2020 – eight years from now, with India as an obvious market. Statoil’s inquiry has been sent to the oil ministry but it is not clear if this has filtered down to GAIL or Petronet-LNG, the obvious choice of talking partners.

With a population of just 43 million, Tanzania does not have a big market for gas. “That’s why Statoil is approaching us,” says a foreign ministry mandarin.

“Now is the right time to talk to them. GAIL should immediately respond and show it is interested.